Production sector can no longer pull GDP off

    The growth of the Belarusian economy, secured primarily by the development of the industrial complex, seems to have demonstrated an annual maximum in the first half of the year and consolidated the results achieved in July. In the future, we can expect a decrease in its rates, writes the Ekonomicheskaya gazeta newspaper.

    According to Belstat (the National Statistics Committee of the Republic of Belarus), the GDP volume in January – July 2021 at current prices amounted to 95.4 billion BYN. The growth rate of the main indicator for this period in comparable prices amounted to 3.3%.

    A similar indicator was recorded a month earlier after gaining 0.1 percentage points in May. Thus, the growth of the economy in annual terms is likely to have reached its peak.

    The main influence on the rise in GDP, as before, is exerted by production sector – 2.3%. This is followed by the information and communications sector – 0.7%, wholesale and retail trade – 0.3%. The transport and logistics sector moved into the positive zone, its contribution is estimated at 0.2%. At the same time, agriculture had a zero impact after a short positive on the GDP dynamics, construction is still in the negative zone – minus 0.8%.

    So, for 7 months of 2021, the volume of industrial production in current prices amounted to 84.1 billion BYN, an increase in comparable prices to the same period last year amounted to 9.3%. After a breakthrough observed in the segment and a monthly increase in annual growth rates for the second month in a row, the indicators are declining, although not very significantly. The peak was noted in May: compared to the same period last year, the volume of industrial production increased by 11.1%.

    The reduction in the recovery in industry is primarily due to the zero change in the growth rates of the entire economy in July.

    Production in the mining industry in January-July increased by 0.7%. Development is being demonstrated for the second month, before that, for almost a year and a half, a monthly drop in volumes was recorded here. The share of this type of activity in the total volume of industrial production amounted to 1.2%. However, within the industry itself, the picture is not at all uniform.

    For example, the production of dolomite increased by 7.1%, natural gas – by 6.1%, oil – by 1.2%. At the same time, the production of granite fell by 36.7%, building sands – by 19.9%, gravel and crushed stone – by 14.6%.

    Flour – enough for more than three days

    In the manufacturing industry, an increase of 9.3% was noted for 7 months. It accounted for 88.8% of the total production.

    In particular, the production of foodstuffs, beverages and tobacco products (23.5% of the total production) increased by 2.1% compared to January – July 2020. And since April, the growth rates have been decreasing here. The largest increase over a seven-month period is observed in cereals (20.8%), cognac (19.4%), canned fruits and vegetables (15.9%), malt (14.4%) and flour (12.8%). The largest decrease was observed in the production of starches (except for modified starches) – by 43.3%. The production of meat and offal decreased over the period under review by 5.3%, milk and cream – increased by 3.1%.

    The production of textiles, clothing, leather and fur products (3% of the total industrial production) in January – July 2021 showed + 6.8% to the same level last year. However, for the first time since the beginning of this year, the pace here went down.

    In woodworking and paper production, the growth was at the level of 11.1%. And unlike other areas of the manufacturing industry, its pace continues to grow. In particular, with a slight decrease in the production of sawn timber and parquet, cellulose and fuel briquettes, by 25.4% more than in the same period last year, panels and parquet boards were produced, by 23.2% – plywood, by 21.1% – wooden doors and windows, 20.5% – paper and cardboard. However, the production of napkins and toilet paper decreased by almost a quarter.

    Pharmaceutical products and drugs (1.3% of the total industrial production) were produced by 9.6% more than in the same period last year. And the volume growth has been strengthening since April.

    Rubber and plastic products made a zero contribution to the dynamics of industrial production, metallurgy grew by 9.6%, the production of computing, electronic and optical equipment – by 21.5%. Electrical equipment was produced by 13.4% more than in the same period last year, transport vehicles – by 15.7%.

    In July, stocks of finished products in warehouses of industrial organizations decreased by almost 190 million BYN, and as of August 1, amounted to more than 5.2 billion BYN. The ratio of stocks and average monthly production in January – July 2021 amounted to 54.2% against 74% in the same period last year.

    Calmness in the agricultural sector

    In January – July in agricultural organizations, peasant (farmer) households, production at current prices amounted to 10.7 billion BYN. In comparable prices, this is plus 0.1% to the level of the same period in 2020. Growth rates in the agro-industry have remained near zero since the beginning of this year.

    In January – July, the volume of investments in fixed assets decreased by 8.3%, amounting to 15.5 billion BYN. A decrease in this indicator has been observed since June 2020, although in January this year, and then from March to June, the rate of decline in investments slowed down. A certain decline is also noted in terms of the volume of contract work in construction – by 15.9% to 6.8 billion BYN.

    Wholesale trade in January – July 2021 amounted to 72.3 billion BYN. In comparable prices over the same period last year, it grew by 8%. Retail showed much more modest results: here the growth – by 0.4% to 33.2 billion BYN. The rise, although weak, is recorded here for the second month in a row after almost six months of subsidence.